IEA Highlights Estonia’s Clean Energy Progress, Urges Swift Shift from Oil Shale

In a bid to achieve its climate-neutral economy goal by 2050, Estonia faces the imperative of expeditiously replacing oil shale with renewable energy sources in its power system, as revealed in a comprehensive policy review by the International Energy Agency (IEA). Estonia, dedicated to the energy transition, acknowledges the need for a swifter phase-out of oil shale in electricity generation and the streamlining of permitting processes for new renewable energy projects to meet its ambitious climate targets while ensuring energy security, as highlighted in the IEA’s in-depth policy analysis.

The IEA commends Estonia’s progress in reducing greenhouse gas emissions through the adoption of renewable energy sources such as wind, solar PV, and biomass. However, the report notes an increase in emissions since 2020, primarily attributed to the resurgence of shale oil use in electricity and heat generation. Land use and forestry have also become a net source of emissions.

Estonia’s recent initiatives, including the establishment of a Ministry of Climate with broad authority over energy-related policies, are recognized by the IEA. The ministry is tasked with overseeing the nation’s flagship targets for 2030 and 2050, aiming to have renewables meet 100% of annual electricity demand and achieve climate neutrality, respectively. The IEA report underscores the importance of institutional and legislative frameworks to provide policy clarity, encourage private sector participation, and coordinate actions necessary for meeting Estonia’s climate and energy objectives.

Acknowledging the geopolitical challenges Estonia faces post-Russia’s invasion of Ukraine, the report applauds Estonia’s decisive actions to cease all remaining energy trade with Russia while maintaining regional energy security and advancing the energy transition. The country has taken steps to enhance regional gas security, reduce natural gas demand, and cut emissions in its gas supply, notably through increased biomethane production.

IEA Deputy Executive Director Mary Burce Warlick commends Estonia’s strides, commenting, “Estonia is making great strides to reduce its reliance on oil shale and boost deployment of wind and solar generation. It now needs to build on this success and accelerate the energy transition by aligning fiscal measures with its medium and long-term energy and climate goals. It is important that such action is taken with a people-centred transition in mind. The IEA is committed to continuing to work with Estonia to achieve its energy transition goals.”

The IEA report provides recommendations for further emissions reductions across sectors, emphasizing the importance of clear policies, market regulations, and incentive schemes for renewable energy deployment. Streamlining permitting processes for wind, solar, and other technologies is also encouraged. In the transport sector, the IEA recommends introducing price signals to promote energy-efficient vehicles, including electric ones. Additional suggestions include updating energy excise duties, increasing carbon prices, ending fuel subsidies, and implementing vehicle taxation to phase out polluting transport.

Estonia’s role as a European technology hub and a rare earth metals processing facility offers potential leadership in energy sector digitalization and strategic significance in the critical minerals supply chain. The report concludes by highlighting Estonia’s potential to lead in secure clean energy transitions, promoting best practices and knowledge sharing for a sustainable and affordable clean energy future.